People v. Katz

Decision Date13 November 2002
Docket NumberNo. 00PDJ053.,00PDJ053.
Citation58 P.3d 1176
PartiesThe PEOPLE of the State of Colorado, Complainant, v. Jerrold C. KATZ, Respondent.
CourtColorado Supreme Court

Opinion by the Hearing Board consisting of the Presiding Disciplinary Judge ROGER L. KEITHLEY and Hearing Board members, BOSTON H. STANTON, JR. and THOMAS J. OVERTON both members of the bar.

AMENDED OPINION AND ORDER IMPOSING SANCTIONS

SANCTION IMPOSED: ATTORNEY DISBARRED

The trial in this matter was held on September 9 through 13, 2002, before a Hearing Board consisting of the Presiding Disciplinary Judge Roger L. Keithley ("PDJ") and two hearing board members, Boston H. Stanton, Jr., and Thomas J. Overton, both members of the bar. Gregory G. Sapakoff, Assistant Regulation Counsel represented the People of the State of Colorado (the "People"). Gary S. Cohen represented the respondent, Jerrold C. Katz, ("Katz") who was also present.

The People's exhibits 1 through 13, 14 (admitted for limited purpose), 15 and 18 were offered and admitted into evidence. Katz's exhibits 101, 102, 103, 104, 105, 106, 108, 109, 110, 111, 112, 117, 118, 125, 128, 129 through 154, 157, 158, 159, 169, 171, 172, 173, 178, and 179 were offered and admitted into evidence. The Hearing Board heard testimony from the People's witnesses Jerrold Katz, Allan Molk, Charles Kercheval, Robin Beattie, Carmell Ryan, and John Salmon. In lieu of live testimony from David Wollins, a portion of Mr. Wollins' deposition transcript was read into the record by stipulation. The Hearing Board also heard testimony from Katz's witnesses Irving Johnson, Greg L. Perczak and Gary Gutterman, M.D. Katz testified on his own behalf. In lieu of having John Salmon testify as a witness in the respondent's case, the parties stipulated as to how Mr. Salmon would testify with respect to certain matters. The Hearing Board considered argument of counsel, assessed the credibility and testimony of the witnesses, the exhibits admitted, the stipulated statement of facts set forth in the Trial Management Order, and made the following findings of fact which were established by clear and convincing evidence.

I. FINDINGS OF FACT

Jerrold Katz was licensed to practice law in the State of Massachusetts in 1964. He was licensed to practice law in the State of Colorado in 1984, attorney registration number 13966. Katz maintained a law practice in both Massachusetts and Colorado during all times relevant to the events in question.

From 1991 to 1996, Katz was in partnership with Susan L. Sanger in Colorado. In 1996 that partnership dissolved. In March of the following year, Katz contacted John Salmon ("Salmon") of Salmon, Lampert and Clor, P.C. ("SLC") to inquire whether he would be interested in collaborating on medical malpractice cases. Although Salmon agreed to a co-counseling arrangement, the specifics of the collaboration agreement were not reduced to writing. The specific nature of the collaboration arrangement is the subject of dispute. Although Katz has taken the position the business arrangement was a joint venture, Salmon describes it as only a co-counseling relationship for specific cases. The precise nature of the business relationship will be decided in a civil action pending in the Arapahoe County District Court, Case No. 99CV3206.

Following their agreement to participate jointly in the representation of clients, Salmon and Katz maintained separate malpractice insurance policies, separate phones, and separate advertising. On cases generated by Katz in Colorado, SLC had the right to exercise the co-counsel arrangement or decline to co-counsel. If SLC declined to co-counsel on a given case, Katz could look elsewhere for co-counsel. On cases in which a co-counsel arrangement was undertaken, both firms filed entries of appearance on behalf of the client. The co-counsel cases were based on contingent fee agreements and Katz and SLC would recover attorneys' fees only if successful on the claims. On co-counseled cases, SLC would advance payment of costs and, upon successful conclusion of the representation and receipt of funds through judgment or settlement, SLC would recover the costs advanced and receive sixty percent of the attorney fees earned. Katz would receive forty percent of the attorney fees earned. As part of the arrangement, SLC would provide office space, support staff and the services of associate attorneys to work on the co-counseled cases. Settlement checks were to be deposited into the SLC trust account, and SLC would make distributions of funds consistent with the contingent fee agreement and the co-counsel arrangement.

In March 1997, Katz moved into the SLC offices. Katz continued to practice under the name "Katz and Associates," continued to employ two associates in his Massachusetts office, maintained a full-page advertisement in the Denver Yellow Pages referring to "Katz and Associates," maintained "Katz and Associates" letterhead, and continued to maintain liability insurance, a bank account, and filed tax returns for "Katz and Associates."

One of the cases subject to the co-counseling agreement concerned a medical malpractice action brought by Deanna L. Groves ("Groves"). Groves retained Katz and Associates and SLC to represent her pursuant to a contingent fee agreement signed March 11, 1998. Salmon executed the Groves contingent fee agreement on behalf of both Katz and Associates and SLC. In the Groves case, both firms were listed as counsel of record on the pleadings.

From the outset of the business relationship, disagreements arose between Katz and Salmon. Katz demanded the business relationship be reduced to writing. Salmon questioned the need for costs expended by Katz. Katz questioned the amount of staff support provided for the co-counsel cases and Salmon questioned the amount of time Katz was spending on the cases while maintaining his Massachusetts practice.

By mid 1998, the working relationship between Katz and Salmon had become acrimonious. On August 6, 1998, Salmon notified Katz that their business arrangement was not working out, and provided notice requiring Katz to vacate the SLC offices within thirty days. As a result, Katz moved out of the SLC offices in September 1998, and began renting space from David Wollins ("Wollins") of Wollins, Hellman and Green, PC in Denver.

By letter dated September 25, 1998, Salmon and Katz notified Groves that SLC and Katz and Associates would no longer act as co-counsel on her case. The letter informed her that she must decide which firm should continue to represent her. She chose Katz and Associates.

The Groves medical malpractice matter went to trial in December 1998. Notwithstanding their dispute, Salmon and Katz determined that both Katz and two associate lawyers from SLC, Brian Lampert and Victoria Tucker, should participate in the trial. During jury deliberations, the matter settled for $500,000. Pursuant to that settlement, on December 22, 1998, a settlement check was issued in the amount of $500,000 and made payable to Groves, SLC and Katz and Associates.

By that time, the relationship between Salmon and Katz had further deteriorated and they both harbored mistrust of the other. The mistrust was of sufficient magnitude that they could not agree upon the trust account into which the settlement check should be deposited. Salmon insisted it be deposited into the SLC account consistent with the co-counseling agreement, and Katz demanded it be deposited into his trust account consistent with the client's request. Katz retained Alan Molk ("Molk") and Salmon retained Robin Beattie ("Beattie") to represent their respective interests in connection with their disagreements including the distribution of the Groves settlement proceeds. Initially, their attorneys attempted to resolve all of the Katz/Salmon disagreements in conjunction with the Groves settlement. By early January, it became apparent that resolution of the entire disagreement would not be promptly forthcoming and negotiations focused upon the distribution of the Groves settlement proceeds. By January 11, 1999, Katz and Salmon had agreed, through counsel, to deposit the $500,000 settlement check into a joint COLTAF account from which funds could be withdrawn only upon the signature of both Salmon and Katz, and that the portion of the settlement payable to Groves, $200,000, would be immediately disbursed to her.

On January 12, 1999, Salmon, Beattie, and Groves met Charles Kercheval, the senior vice president of First Bank at First Bank of the Denver Tech Center. Katz arrived shortly thereafter without his attorney.1 Mr. Kercheval informed the parties that his bank could not open a COLTAF account which required two signatures but the bank would be willing to open a joint account requiring two signatures on all checks in excess of $10,000. During those discussions, Beattie informed Katz that notwithstanding the account's $10,000 limitation on signatures, Salmon would agree that no checks would be drawn on the account without both Salmon and Katz's authorization. Beattie stated that in order to insure no funds were removed absent such joint authorization, she would retain custody of all checks and bank statements. Katz agreed with that arrangement. Immediately thereafter, a joint account was opened requiring two signatures for withdrawals with only Katz and Salmon as authorized signatories.

The bank took possession of the $500,000 settlement check and issued a cashier's check to Groves in the amount of $200,000. The bank deposited the balance of the proceeds from the Groves settlement check, $300,000, into the joint account. From the time of the settlement through the date the joint account was opened, both Salmon and Katz were aware that there were numerous third parties who asserted claims against the remaining settlement funds, including both Salmon and Katz for costs advanced.

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8 cases
  • Attorney Grievance Comm. v. Pennington
    • United States
    • Maryland Court of Appeals
    • 22 June 2005
    ...have affirmatively held that the good faith reliance on the advice of counsel is never defense in a disciplinary action. See People v. Katz, 58 P.3d 1176, 1187 (Co[lo].2002) (`It is the individual attorney's duty and obligation to comply with Rules of Professional Conduct. The attorney may ......
  • Larew v. Hope Law Firm, P.L.C.
    • United States
    • Iowa Supreme Court
    • 24 June 2022
    ...to reach the issue has held this rule applies to fee disputes between co-counsel in separate firms. See, e.g. , People v. Katz , 58 P.3d 1176, 1180–84, 1189 (Colo. 2002) (holding that an attorney violated Colorado's safekeeping property rule utilizing language very similar to Iowa Rule of P......
  • The Florida Bar v. St. Louis
    • United States
    • Florida Supreme Court
    • 3 May 2007
    ...3. Similarly, other jurisdictions have held that the defense is not available in bar discipline proceedings. In People v. Katz, 58 P.3d 1176, 1187 (Colo.P.D.J.2002), that court said: "It is the individual attorney's duty and obligation to comply with the Rules of Professional Conduct. The a......
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    • Florida Supreme Court
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    ...in St. Louis: [O]ther jurisdictions have held that the defense is not available in bar discipline proceedings. In People v. Katz, 58 P.3d 1176, 1187(Colo.P.D.J.2002), that court said: “It is the individual attorney's duty and obligation to comply with the Rules of Professional Conduct. The ......
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5 books & journal articles
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    • United States
    • Colorado Bar Association Colorado Lawyer No. 48-2, February 2019
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    ...2012); Daniels v. Alander, 818 A.2d 106, 110-11 (Conn.App. 2003); and In re Kalal, 643 N.W.2d 466, 474 (Wis. 2002) [6] People v. Katz, 58 P.3d 1176, 1189 (Colo. O.P.D.J. 2002) (citation omitted) [7] People v. Maynard, 219 P.3d 430, 436 (Colo. O.P.D.J. 2008) (emphasis in original) [8] See al......
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    • Colorado Bar Association Colorado Lawyer No. 44-2, February 2015
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    • United States
    • Colorado Bar Association Colorado Lawyer No. 51-10, November 2022
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    ...32 Geo. J. Legal Ethics 235, 277 (Spring 2019). [4] In re Fisher, 202 P.3d 1186, 1198 (Colo. 2009). [5] Id [6] People v. Katz, 58 P.3d 1176,1187 (Colo. O.P.D.J. Nov. 22, 2002). Opinions of disciplinary hearing boards "serve to instruct and guide, but not bind, future Hearings Boards in thei......
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